Question 1

Licensing is a good option for small manufacturers wanting to launch a well-known brand internationally.

Accepted Answer

A) True 
 B)False

Question 2

On what grounds are multinational corporations (MNCs)  often criticized by anti-globalization activists?

Accepted Answer

A)   They increase unemployment in the host country.
B)   They bring in technology that is unknown to the host country.
C)   They use the capital-intensive mode of production.
D)   They are liable to pay the taxes levied by the government of the host country.
E)   They misuse and misallocate scarce resources.F) C) and E)
G) B) and E)

Question 3

Janie took a vacation to Italy and bought $1,000 worth of jewelry in Florence. The United States will allow Janie to bring $800 back into the country duty free. What happens to the other $200 that is part of her total expenditure?

Accepted Answer

A)   Janie does not have to account for the extra $200; the U.S. government will pay a duty tax on it.
B)   Janie cannot bring home more than $800 worth of goods, so she must return $200 worth of merchandise.
C)   Janie must pay an ad valorem tariff on the extra $200.
D)   Janie must pay a fixed tariff on the extra $200.
E)   Janie must claim the $200 as an export tariff.F) A) and C)
G) A) and B)

Question 4

A Swedish auto manufacturer has an American company produce its auto manuals. For the American firm, this is an example of

Accepted Answer

A)   insourcing.
B)   licensing.
C)   franchising.
D)   outsourcing.
E)   offshoring.F) B) and D)
G) A) and B)

Question 5

A(n)  ________ is best defined as a prohibition on trade in a particular product.

Accepted Answer

A)   ad valorem tariff
B)   excise tax
C)   cartel
D)   quota
E)   embargoF) D) and E)
G) A) and B)

Question 6

Which scenario is an example of importing?

Accepted Answer

A)   The National Football League enters into a contract with a German company allowing it to sell its hats and gloves with the NFL logo on them.
B)   A Belgium firm invests in building a factory in Canada and moves its manufacturing operations there.
C)   To meet the worldwide demand for oranges, orange growers in Florida have increased sales of the product to areas outside of the United States.
D)   A computer software company located in the United States decides to have a firm in India handle its customer service.
E)   A company in the United States buys clothing from a French clothier to sell in its retail store.F) All of the above
G) A) and D)

Question 7

As an international business opportunity, direct investment provides the least amount of control but is also the least expensive way to participate in foreign trade.

Accepted Answer

A) True 
 B)False

Question 8

More and more companies are moving from the multinational strategy to a global strategy that involves ________ products.

Accepted Answer

A)   customizing
B)   standardizing
C)   promoting
D)   normalizing
E)   generalizingF) B) and C)
G) A) and B)

Question 9

One of the outcomes of a country continually operating with a trade deficit is

Accepted Answer

A)   an increase in successful businesses.
B)   an increase in the number of exported products.
C)   an increase in unemployment.
D)   a decrease in the number of imported products.
E)   a higher standard of living.F) A) and E)
G) C) and D)

Question 10

A global strategy involves standardizing products for the whole world.

Accepted Answer

A) True 
 B)False

Question 11

If the United States were to devalue its currency, the most likely result would be

Accepted Answer

A)   an increase in foreign tourists to the United States.
B)   a decrease in the number of foreign tourists to the United States.
C)   a decrease in the sale of domestic goods.
D)   an increase in its imports.
E)   an increase in the cost of American goods abroad.F) B) and E)
G) B) and D)

Question 12

Which organization was established by the industrialized nations in 1946 to loan money to underdeveloped and developing countries?

Accepted Answer

A)   the Foreign Credit Insurance Association
B)   the Exim Bank
C)   the World Bank
D)   the World Trade Organization
E)   the International Monetary FundF) A) and B)
G) B) and D)

Question 13

Stuart handles international transactions for other firms. He buys goods on consignment and stores them until they are purchased by a buyer in the international marketplace. After the goods are purchased, Stuart is also responsible for transporting the goods. Stuart is acting as a(n)

Accepted Answer

A)   licensing agent.
B)   franchising agent.
C)   export agent.
D)   contract manufacturer.
E)   direct investor.F) A) and E)
G) A) and D)

Question 14

Ann bought a new shirt from a retailer in the United States. When she checked the tag, she saw that her shirt was made in Vietnam. This means her shirt is a(n)  ________ good.

Accepted Answer

A)   exported
B)   outsourced
C)   absolute
D)   imported
E)   domesticF) A) and E)
G) A) and D)

Question 15

Schweppes Tonic Water discovered during an ad campaign in Italy that its name was translated to read "Schweppes Toilet Water." Effective translations of product names are an example of a(n)  ________ barrier to international trade.

Accepted Answer

A)   political
B)   cultural
C)   legal
D)   ethical
E)   demographicF) A) and C)
G) D) and E)

Question 16

Discuss the organizations and agreements, specifically the General Agreement on Tariffs and Trade, the World Trade Organization, the World Bank, and the International Monetary Fund, that foster international trade and can help companies succeed in global markets.

Accepted Answer

The General Agreement on Tariffs and Tra...

Question 17

If a company in the United States buys, sells, and trades goods and services with several other countries, it is engaged in

Accepted Answer

A)   international business.
B)   contract manufacturing.
C)   outsourcing.
D)   direct investment.
E)   the balance of trade.F) A) and E)
G) B) and D)

Question 18

Sociocultural differences, such as variations in body language and personal space, rarely have an impact on international business.

Accepted Answer

A) True 
 B)False

Question 19

A company headquartered in Milan, has completely transferred its printing services to a company in Germany because the labor and supplies are less expensive there. This is an example of

Accepted Answer

A)   licensing.
B)   franchising.
C)   offshoring.
D)   insourcing.
E)   outsourcing.F) B) and C)
G) All of the above

Question 20

A business that is engaging in importing and exporting must be familiar with the ratio at which one nation's currency can be exchanged for another. In other words, the business must be familiar with the balance of trade.

Accepted Answer

A) True 
 B)False

Exam 3: Business in a Borderless World

Discuss the organizations and agreements, specifically the General Agreement on Tariffs and Trade, the World Trade Organization, the World Bank, and the International Monetary Fund, that foster international trade and can help companies succeed in global markets.

Correct AnswerverifiedThe General Agreement on Tariffs and Tra...View AnswerShow Answer

A(n) ________ is best defined as a prohibition on trade in a particular product.

Correct AnswerverifiedShow Answer

A company headquartered in Milan, has completely transferred its printing services to a company in Germany because the labor and supplies are less expensive there. This is an example of

Correct AnswerverifiedShow Answer

A business that is engaging in importing and exporting must be familiar with the ratio at which one nation's currency can be exchanged for another. In other words, the business must be familiar with the balance of trade.

Correct AnswerverifiedShow Answer

Stuart handles international transactions for other firms. He buys goods on consignment and stores them until they are purchased by a buyer in the international marketplace. After the goods are purchased, Stuart is also responsible for transporting the goods. Stuart is acting as a(n)

Correct AnswerverifiedShow Answer

If the United States were to devalue its currency, the most likely result would be

Correct AnswerverifiedShow Answer

On what grounds are multinational corporations (MNCs) often criticized by anti-globalization activists?

Correct AnswerverifiedShow Answer

One of the outcomes of a country continually operating with a trade deficit is

Correct AnswerverifiedShow Answer

Ann bought a new shirt from a retailer in the United States. When she checked the tag, she saw that her shirt was made in Vietnam. This means her shirt is a(n) ________ good.

Correct AnswerverifiedShow Answer

Sociocultural differences, such as variations in body language and personal space, rarely have an impact on international business.

Correct AnswerverifiedShow Answer

Janie took a vacation to Italy and bought $1,000 worth of jewelry in Florence. The United States will allow Janie to bring $800 back into the country duty free. What happens to the other $200 that is part of her total expenditure?

Correct AnswerverifiedShow Answer

Schweppes Tonic Water discovered during an ad campaign in Italy that its name was translated to read "Schweppes Toilet Water." Effective translations of product names are an example of a(n) ________ barrier to international trade.

Correct AnswerverifiedShow Answer

Licensing is a good option for small manufacturers wanting to launch a well-known brand internationally.

Correct AnswerverifiedShow Answer

Which scenario is an example of importing?

Correct AnswerverifiedShow Answer

As an international business opportunity, direct investment provides the least amount of control but is also the least expensive way to participate in foreign trade.

Correct AnswerverifiedShow Answer

If a company in the United States buys, sells, and trades goods and services with several other countries, it is engaged in

Correct AnswerverifiedShow Answer

A global strategy involves standardizing products for the whole world.

Correct AnswerverifiedShow Answer

More and more companies are moving from the multinational strategy to a global strategy that involves ________ products.

Correct AnswerverifiedShow Answer

Which organization was established by the industrialized nations in 1946 to loan money to underdeveloped and developing countries?

Correct AnswerverifiedShow Answer

A Swedish auto manufacturer has an American company produce its auto manuals. For the American firm, this is an example of

Correct AnswerverifiedShow Answer

Correct Answer
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The General Agreement on Tariffs and Tra...
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